To my fellow Credit Unions in Washington state, I was wondering how your credit union is handling compliance with DFI's Bulletin B-18-5 regarding guidance on 1 - to - 4 family dwelling loans after the revised definition of a MBL? This is the bulletin that outlined that while loans on 1 - to - 4 family dwellings would no longer be considered MBLs for reporting purposes, DFI would still expect the credit union to treat the loans like MBLs through underwriting and on-going monitoring and reviews if the member was primarily relying on rental income from the property(ies) for repayment of the loan.
I know this is four years old at this point, but our home lending team is wanting to revisit our process and I wanted to see how everyone else was handling it. We had chosen at the time to not originate loans where we would need to handle the loan as a MBL. However, with new home loans starting to really slow down our home lending team is supposedly hearing from other credit unions in the area that they are financing these type of loans and not treating them as MBLs. I'm a little dubious at this claim, but I'd love to hear from anyone that is originating investment property loans that primarily rely on the rental income to repay the loan, are you:
a) Treating these loans as MBLs and conducting annual reviews to monitor the financials and collateral
b) Ignoring the DFI bulletin and originating these loans as any other home loan, or
c) some third option that I am unaware of.
Any response would greatly be appreciated.
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 B-18-15.pdf | 41.46 KB |
